What’s Causing the Rumble in Precious Metals?

Miners are tumbling

Most precious metals have witnessed a choppy market for most of 2018, thanks to slumping gold prices. Precious metals are more closely associated with the downturn in precious metals than they are with the equity markets.

In this part of our series, we’ll look at the performances and technicals of a few select miners. The miners we’ve selected are Alamos Gold (AGI), First Majestic Silver (AG), B2Gold (BTG), and New Gold (NGD). Among these four miners, only AG has seen a YTD (year-to-date) gain of 10.8%, while AGI, BTG, and NGD have had YTD losses of 14.2%, 18.4%, and 38.6%, respectively.

What’s Causing the Rumble in Precious Metals?

The VanEck Vectors Gold Miners ETF (GDX), the mining-based fund, has fallen 5.3% YTD. The last week has been choppy for GDX and the above four miners.

Moving average indicator

BTG and NGD are trading at considerable discounts to their 20-day and 100-day moving averages. AGI is trading above its 100-day moving average but below its 20-day moving average. It continues to trade considerably above both its 20-day and 100-day moving averages. Usually, if a stock is trading at a significant discount to its moving average, that suggests a potential price rise, while a significant premium indicates a fall. AG is primarily a silver mining company.

All four miners’ target prices are considerably higher than their current trading prices, which suggests potential rises.

RSI scores

As of June 25, AGI, AG, BTG, and NGD had RSI scores of 49.5, 57, 24.3, and 43.8, respectively. GDX had an RSI score of 39.6. An RSI score above 70 suggests an impending downward price correction, while a score below 30 indicates an upward price correction.